Crypto has entered a bear market in 2022. Here’s how cybercrime and NFT swindles have helped fuel the downturn.
After the digital asset boom in 2021, the market has reversed course this year as investors shed positions in cryptocurrencies and NFTs amid a broader bear market and a slate of high-profile cyber-attacks in the sector. The crypto market has cratered from its peak valuation of $3 trillion in November to $1.3 trillion this week. Bitcoin has lost 38% year to date, while ether — the second-biggest crypto and frequent gauge for sentiment — has plunged more than 53%. And weekly NFT sales have tumbled 80% from their early January peak of nearly $1 billion. A key event in the downturn came in April, when North Korean hacking outfit Lazarus perpetrated a $625 million crypto hack on the popular Axie Infinity play-to-earn game. And since then, there have been three attacks on the hugely popular NFT company Yuga Labs. Hackers this weekend just made off with roughly $360,000 worth of Bored Ape NFTs. Hacks have influenced the downturn “in some respects” as some people may have lost faith, but that doesn’t mean the technology is no longer promising, Ari Redbord, head of legal and government affairs at TRM Labs, told Insider.